Question

In 2013, manufacturing workers in the United States earned average compensation of $36.34 per hour. That same year, manufacturing workers in Mexico earned average compensation of $6.82 per hour.

U.S. manufacturers can possibly compete if:

a) the product in the United States is specialized.
b) some production is done in low-wage countries.
c) technology is cheaper in the United States.
d) U.S. workers are more productive.

Answer 1

The correct answer is D. U.S. workers are more productive.

Step-by-step explanation:

The objective of productivity is to measure the efficiency of production for each factor or resource used, understanding by efficiency the fact of obtaining the best or maximum performance using a minimum of resources. That is, the less resources needed to produce the same quantity, the greater the productivity and therefore, the greater the efficiency.

The formula for calculating productivity is the ratio between production obtained and resources used.

Productivity = Production obtained / Amount of factor used

For example, to calculate the productivity of a country we can divide the GDP by the number of hours worked. The result will be how much has been produced in the country, on average, for each hour worked.